1/3. The Reason for Entering
This summer holiday I entered the Marshall Essay Competition, which is the second time I compose an essay myself.Firstly, I want to share my reason for entering– perhaps it is more appropriate to call it the reason for this “impulse”.
To be honest, I didn’t mean to take part in this competition at the very beginning, as I believed that the whole process of essay composition would cost a quite long time while I don’t have so much time during this summer. However, one of my original major activity was canceled, leaving me lots of free time. Once in economic class, my teacher showed me several Africa-related materials including GDP, HDI and some local government documents, asking for my comments. We discussed passionately about the current situation of Africa. My teacher analyzed from the perspective of economics, and introduced the economic system of Africa to me, which I was quite interested in. At the same time, I tried to use colonial history and geography to explain local situation, which was also affirmed and supported by the teacher. Suddenly I came up with an idea that there is a topic in this year’s Marshall essay competition about the development of Africa. I realize that this topic plays an extremely important role in modern society, as helping Africa develop can largely promote the reduction of poverty and thus accelerate international development. It is also a humanitarian project. However, this is by no means a simple question. All the factors that affect the local development should be considered, such as history, geography, economic system, political system, education and even culture. This kind of complexity is also the reason why experts and politicians has different perspectives on African issues. To summarize, I think this topic is very meaningful. It not only allows me to have a deeper understanding of the situation in Africa, but also allows me to form my own insights on international hot topics and cultivate my comprehensive analysis skills. Therefore, why not have a try?
2/3. The Process of Composing
Secondly, I would like to share the process of writing this essay, and compare it with my last experience.
It was less than two weeks before the submission deadline when I started preparing. Therefore, a good plan seems quite significant for this urgent task. First of all, I finished writing the outline within the first two days. Then I searched for data materials through Google, Baidu and World Bank. I sort them out, and at the same time developed my paragraphs. During this process I found that there are some arguments in my creation without evidence, thus I looked for their reference again. Finally, since the number of words greatly exceeded the limit, I deleted some redundant content.
The whole process is quite different from that when I participated in the John Locke competition, which I think can be considered as several progress I made when the second time I write essay on my own.
- I recognize the importance of references. In the process of last time writing , I paid more attention on summarizing my views and getting inspiration by asking teachers and friends. In this way, although I have indeed came up with loads of my own ideas independently, there are few strong evidences to support them. On the contrary, during the process of this time writing , I read a lot of documents before composing, and what’s helped me a lot is the way of “snowballing” –looking for the parts I need in the references of a paper, therefore expand my scope of reading.
I felt like my references this time are more substantial and the whole essay reads more professional.
- I know more clearly about when to have my tutorial. Last time, my tutor and I made paid a lot of attention to the revising of proposal, but inversely not much to the paragraph development after the outline was completed. Unlikely, this time I only did two tutorials twice. For the first tutorial, I briefly confirmed the structure of the paper to my tutor, making sure that I should divide the paper into four parts: introduction, analysis, suggestion, and conclusion. And I also clarified the content of the two analyses and suggestions with my tutor. Then I started writing the draft by myself. When it was revised to my satisfaction, I sent it to tutor and then he suggested me to adjust the structure of specific paragraphs. In this way, I have a lot of time to polish my words, expressions and make the article reads more accurate.
However, there are still something I need to focus on next time – for example, the time for preparation was quite too limited, and that I only read some of the abstract of references instead of the whole content.
3/3. The Content of Essay
Last but not least, I am going to post my essay here.
This paper is quite different from the ones in the a-level economic examination. It is not a purely economic essay, but rather a land-econ one. And I really appreciate that it needs to use a lot of geographical, historical and other comprehensive factors to analyze the economy and development of a particular region. The following is my essay. It is a pity that some of the graphs and references can not be showed clearly here.
QUE 6: AFRICA HAS OFTEN BEEN DESCRIBED AS THE ‘SHACKLED CONTINENT’. IS THERE STILL HOPE FOR ECONOMIC DEVELOPMENT IN AFRICA?
FANG Ziyan
Nanjing Foreign Language School
1.Introduction
Three decades of effort on development in Africa have yielded pitiful returns, which accord with its title of ‘the imprisoned continent’[Guest, R. (2010). The shackled continent: Power, corruption, and African lives. Smithsonian Institution.]. African economies have been stagnating, even regressing. Chart 1A shows the GDP per capita of Africa underwent slow growth over the past 30 years, the value of which has always been the lowest or near the lowest among the ones of all continents. Additionally, chart 1B shows the balance of payments (‘BOP’) of African countries have been close to zero in the first fifteen years. Then large fluctuations appeared, even a long-term deficit, indicating the economy to be struggling or weak ones.
This article shall explore the factors that have hindered the economic development of Africa in the past, examining whether they will always hold Africa back, ultimately finding that there is hope for the continent.
Chart 1A GDP per capita of Africa, from 1991 to 2018
(source from World Bank)
Chart 1B BOP of all countries in Africa, from 1991 to 2018
(source from World Bank)
2.Analysis of the economic situation in Africa
2.1 Why has economic development been so poor?
Donald Kaberuka, who served as the president of the African Development Bank, pointed out two main factors which are often used to explain the failure of the development enterprise in Africa.2 The first is structural, including geographic and ecologic elements; for example, the high concentration of landlocked countries, tropical soils, and epidemics, etc. However, these factors are not the decisive ones. Second, and arguably more critical, is the history, politics and economy of African countries.
From the mid-15th century to the 1980s, many African countries were colonies. The colonists took resources but did not leave behind the core technology of the economy, the high-end local human resources, the complete industrial chain, and the design of a reasonable industrial structure based on the characteristics of the colony’s resources.[ 舒运国. (2020). 试析独立后非洲国家经济发展的主要矛盾. 西亚非洲, No.271(02), 93-112.] Hence many problems appeared post-independence. In terms of politics, ethnic and border conflicts left from colonial rule triggered border wars[ Dodo, M. K. (2018). Why is Africa Lagging Behind in Economic Development? A Critical Review. Journal of Asia Pacific Studies, 5(1).]. Terrorism spread, for instance, the “Kobo Haram” in Nigeria and the “Shabaab” in Somalia, which led to multi-party internal fighting.
As for the economic structure, the economic lifeline of a number of large African industries is in the hands of foreigners. For example, major oil companies such as Mobil, BP, CITRON, Eni, Total. Even if there are indeed local giants in Africa, such as De Beers of mining industry and MTN of telecommunications, their true controllers are still British, American and French.
2.2 Effects of these factors
Political turmoil has several adverse effects on African economic growth. Firstly, political instability may prolong production time and reduce commodity values, which directly leads to a decrease in international competitiveness. Second, investment falls. This is because once the political system changes, the uncertainty of future investments greatly increases, resulting in a decrease in investor confidence. Thirdly, there will be a large outflow of economically motivated migrants – a ‘brain drain’.
Furthermore, years of colonization have left Africa with an incomplete industrial chain and high-end development opportunities. The current development of most African countries still relies on the model of export-led growth. Nigeria, for example, experienced a recession in 2015-2016 and its government stated that the major factor responsible was the decline in oil revenues and the over-dependence of the economy on this single commodity [ Source from http://thenewsnigeria.com.ng/2016/09/fg-plansfiscal-stimulus-strategy-to-inject-15bn-in-ailing-economy/]. According to the Prebisch-Singer hypothesis[ Toye, J. F., & Toye, R. (2003). The origins and interpretation of the Prebisch-Singer thesis. History of political Economy, 35(3), 437-467.], an explanation for this phenomenon is that manufactured goods have a greater income elasticity of demand than primary products, especially food. Therefore, as incomes rise, the demand for manufactured goods increases more rapidly than demand for primary products. Furthermore a decline in commodity prices tends to reduce revenue rather than increase it, which can be noted from graph 2A. This explains why, despite being an export-led economy, Nigeria’s balance of trade has been negative in recent years, as chart 2B shows.
Graph 2A
Chart 2B Merchandise exports and imports (current US$) -Nigeria
(source from World Bank)
To evaluate the consequences, it should be noted that oil price changes lead to uncertainty lack of investment, lower aggregate demand (‘AD’) and growth. The collapse in oil prices reduces confidence, leading to declining foreign direct investment from $9.7 billion by the end of the second quarter 2014, to $0.64 billion at the end of the second quarter of 20164.
However, there are several advantages to be noted. When oil prices are high, this can increase net exports, AD and growth (graph 2C). On the other hand, when priced are low, it may result in an increase in the current account deficit which can depreciate currency, making other exports more price competitive and further increase AD and growth. Last but not least, investment of foreign countries in oil production can raise long run aggregate supply (‘LRAS’), which can increase real output, employment and living standards (graph 2D).
Graph 2C
Graph 2D
3.So is there hope?
There is still hope for economic development in Africa; so long as the factors which are dragging down its economic development are overcome, its future is promising.
3.1 Ways to aid Africa
Aids from developed countries are traditional projects. However, as mentioned, local economy has not improved much as a result. According to Dambisa Moyo, the reason is that the specific conditions of African countries have been ignored by donors: many of them do not have effective investment and taxation systems. Direct investment fell into the hands of corrupt bureaucrats and entered the consumption field, instead of the investment one.[ Moyo, D. (2009). Dead aid: Why aid is not working and how there is a better way for Africa. Macmillan.] The increase in AD leads to soaring prices and the emergence of inflation.
On the contrary, new forms of aid offered by developing countries such as China in recent years is more practical and feasible[ Campbell, H. (2008). China in Africa: challenging US global hegemony. Third World Quarterly, 29(1), 89-105.]. China invests in the construction of African infrastructure, in return for natural resources, such as rare metals, and the right to use ports. This cooperation not only helps Africa develop, but also offers China resources. Furthermore, China’s capital inflows have eased the capital outflows of African countries caused by Western investor profit remittances and international debt. Simulataneously, China has partially solved the problem of disconnection between the financial and production sectors in the African economy by investing in the real economy.9 For instance, the local employment driven by infrastructure projects of the China Railway 20th Bureau in Africa has brought long-term productivity improvements[ Brautigam, D. (2011). The dragon’s gift: the real story of China in Africa. OUP Oxford.]. Nevertheless, there are still several shortcomings in the use and distribution of funds by China for aid projects in Africa. For example, it was found that its aid benefited more politically privileged regions (such as the birthplace of leaders) than others. In this regard, China should refer to other aid projects that are more evenly distributed, such as the ones of the World Bank.[ Bluhm, R., Dreher, A., Fuchs, A., Parks, B., Strange, A., & Tierney, M. J. (2018). Connective financing: Chinese infrastructure projects and the diffusion of economic activity in developing countries.]
3.2 From the inside
What the African countries need is not only various types of assistance, but also the establishment of their own economic system. African countries should strive to diversify their economies by developing secondary and tertiary industries. In addition, engaging with the international financial market can be another helpful way to development for African countries. They can obtain the funds needed for conomic development through the issuance of treasury bonds. This enables the country to gradually increase its credit by paying the principal and interest on time, and gradually reduces the risk premium of interest rates.6
Though the physical geography of Africa cannot be changed, several man-made problems can be improved. For example, rapid population growth has strained croplands. This contributes to deforestation, putting pressure on the ability of the region to adapt to climate change and the fragile ecology of the dry lands[ Brahmbhatt, M., Bishop, R., Zhao, X., Lemma, A., Granoff, I., Godfrey, N., & Te Velde, D. W. (2016). Africa’s New Climate Economy: Economic Transformation and Social and Environmental Change.]. To solve this problem, intensifying agriculture to boost yields, combined with climate-smart farming techniques, can help raise farmers’ incomes, reduce environmental degr dation and strengthen resilience to climate change. To summarize, strategies which recognize the close links between economic, social and environmental priorities are helpful in the long run.
4.Conclusion
Ultimately, although many factors have hindered economic development in Africa, there is still hope. However, while there are solutions to the problems in theory, their implementation is by no means an easy task. The primary economic structure has taken root in African countries for a long time. It is not easy to carry out the transformation which requires sufficient technology and a large amount of capital. The settlement of social turmoil and national conflict cannot be accomplished overnight as well. Similarly, the geographical issues cannot be completely resolved in the short term.
Many countries and organizations are making efforts in the development of Africa, in order to accelerate the development of the world economy. They are constantly improving aid projects or development policies, looking for more proper ones. Therefore, the future looks bright.
ADDITION: BIBLIOGRAPHY
> [1]Guest, R. (2010). The shackled continent: Power, corruption, and African lives. Smithsonian Institution.
> [2]舒运国. (2020). 试析独立后非洲国家经济发展的主要矛盾. 西亚非洲, No.271(02), 93-112.
> [3]Dodo, M. K. (2018). Why is Africa Lagging Behind in Economic Development? A Critical Review. Journal of Asia Pacific Studies, 5(1).
> [4]http://thenewsnigeria.com.ng/2016/09/fg-plansfiscal-stimulus-strategy-to-inject-15bn-in-ailing-economy/
> [5]Toye, J. F., & Toye, R. (2003). The origins and interpretation of the Prebisch-Singer thesis. History of political Economy, 35(3), 437-467.
> [6]Moyo, D. (2009). Dead aid: Why aid is not working and how there is a better way for Africa. Macmillan.
> [7]Campbell, H. (2008). China in Africa: challenging US global hegemony. Third World Quarterly, 29(1), 89-105.
> [8]Brautigam, D. (2011). The dragon's gift: the real story of China in Africa. OUP Oxford.
> [9]Bluhm, R., Dreher, A., Fuchs, A., Parks, B., Strange, A., & Tierney, M. J. (2018). Connective financing: Chinese infrastructure projects and the diffusion of economic activity in developing countries.
> [10]Brahmbhatt, M., Bishop, R., Zhao, X., Lemma, A., Granoff, I., Godfrey, N., & Te Velde, D. W. (2016). Africa's New Climate Economy: Economic Transformation and Social and Environmental Change.
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